Climate Change Costs By 2100: Doing Nothing Has the Same Price Tag as Doing Something

From Ronald Bailey of Reason. Excerpt:

"Future temperatures will perhaps be higher, by 2100 the average is likely to hover around the ~2°C benchmark. In the scenarios sketched out above, a worst-case 2 percent loss of income resulting from adaptation would mean that the $60,000 and $138,000 per capita income averages would fall to $58,800 and $135,240, respectively.

In the IPCC's mitigation report, the optimal scenario for keeping greenhouse gas concentrations below 450 parts per million would cut future incomes by between 3 and 11 percent by 2100. Let's look at how much the worst-case mitigation scenario might reduce future incomes. Without mitigation, the increase of global gross product to $577 trillion in the "middle of the road" scenario implies an economic growth rate of 2.42 percent between 2010 and 2100. Cutting that growth rate by 0.14 percentage points to 2.28 percent yields an income of $510 trillion in 2100, reducing per capita incomes from $60,000 to $57,000. Growth in the conventional development scenario is cut from 3.07 percent to 2.93 percent, reducing overall income from over $1.015 quadrillion to $901 trillion and cutting average incomes from $138,000 to $122,000.

All of these figures must be taken a vat of salt, since they are projections for economic, demographic, and biophysical events nearly a century from now. That being acknowledged, the IPCC's projected losses to incomes from doing nothing to slow climate change appear to be roughly comparable to the losses incurred by trying to slow climate change. In other words, doing nothing about climate change will cost future generations roughly the same as doing something.

"Most philosophers and economists hold that rich generations have a lower ethical claim on resources than poorer generations," observes the Yale economist William Nordhaus. How much should people living on incomes averaging $10,000 a year now spend to make sure that people whose incomes will likely be many-fold higher don't see their wealth reduced by a couple of percentage points?"